Home
»
Trains Magazine
»
Forums
»
Passenger
»
Transport Subsidies Lead to Bad Decisions

Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="Phoebe Vet"] Businesses don't pay taxes, their customers or clients do by virtue of being the business' source of revenue.  Therefore, the customer is actually paying their share of road subsidies when they make a purchase.[/quote]Whether business customers pay their share of the road costs or subsidies depends on their tax bracket and lifestyle.  If they buy goods and services from a viable business, they are paying a small portion of the entity's tax liability, which goes into the general fund, from whence transfers to the Highway Trust Fund, in the case of federal taxes, are drawn.   Salaries, wages, interest, etc. are taxable to the recipient.  If a person works for a business, as an example, his salary is paid by the entity's customers, as are all business expenses.  He is responsible for filing a personal income tax return for the compensation received.  Employee compensation has nothing to do with the taxes paid by a business, other than it is a deductible expense.  Businesses with taxable income; that is to say, those that make a profit, pay federal income tax and state income tax in those states that levy a business income tax.  They pay other taxes as well, e.g. inventory taxes, payroll taxes, franchise taxes, etc.  With one exception the tax, which is a business cost, is included in the price of their goods and services.  Thus, the customers really pay the tax.  If a business has an inelastic price curve, the owners (stockholders, partners, proprietors, etc.) pay the taxes.  An inelastic price curve means that the business cannot raise its prices high enough to cover the taxes and pass them on to its customers.  There are many reasons why a business might not be able to raise its prices.  One could be loss of market share in a market where a minimum market share is necessary for survival.  This happens, but it is rare.      One of the worst ruses perpetrated by politicians is the assertion that businesses, especially corporations, pay taxes.  Most of them know that the public doesn't understand the difference between personal income taxes and business income taxes.  Or who really pays them.  So they hang the burden on corporate America because they rightly believe that they will get less push back from the public.If all transportation subsidies were eliminated, public transit systems, e.g. Charlotte Area Transit System, etc. could be sustainable without public monies.  If motorists were required to pay the full cost of driving at the pump, they would be shocked at the cost.  Transit would be a viable alternative for many of them, as per my example of Dallas Area Rapid Transit, which would cost less per mile than driving.  The biggest challenge for such a system would be low income people.  It could be managed by raising the earned income tax credit, which would give them the money to pay the higher transit fares.    Until the late 1940s most transit systems in the U.S. were owned and operated by private enterprise.  The New York City subway system was built by private enterprise.  And the North River tunnels that made possible Pennsylvania Station, not to mention the station itself, were built by the Pennsylvania Railroad.  After the 1940s, because of subsidies paid to alternative modes of transportation, as well as a variety of economic and social pressures, private transit systems failed, and they were taken over by local governments.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag